First-Time Homebuyer Down Payment Assistance Programs
This blog will discuss the down payment assistance mortgage program guidelines for homebuyers. A few weeks ago, we announced Gustan Cho Associates are now participating in a down payment assistance program.
We have many different types of down payment assistance programs at Gustan Cho Associates, including for first-time homebuyers, first responders, and homebuyers who have a history of doing charity work.
Gustan Cho Associates receives daily phone calls asking about down payment assistance. We are excited to announce that we are running and can utilize an amazing program to help buyers with the down payment or closing cost. In this blog, we will detail how the DPA Mortgage program works and what the requirements are to utilize this program.
Down Payment Assistance Mortgage Programs Designed To Promote Homeownership
Home Values are rising across the United States, meaning larger down payments are required to buy a house. Many counties offer down payment assistance programs for certain areas. These DPA Mortgage Programs can be difficult to utilize. Certain DPA Mortgage programs have specific parameters.
Gustan Cho Associates now participate in a program that can be used in most states across the Nation. We can only utilize this program in states where Gustan Cho Associates is licensed. There are certain states where the program is not allowed to be used. At this time, we are not licensed in any of those States.
The program is available to most Americans, whether you are a first-time or repeat home buyer. Below we will detail who can utilize the down payment assistance program.
DPA Mortgage Eligibility Requirements And Guidelines
To utilize the down payment assistance program, you must qualify based on one area below. If filing a joint application, such as husband and wife, the only borrower must meet one of the criteria below. At least one of the following criteria must be met:
- The combined household income is equal to or less than 140% of the county’s median income
- This is regardless of family size based on Fannie Mae HomeReady requirements
- Check your area using the link below
Fannie Mae HomeReady Guidelines on Conventional Loans
FANNIE MAE HOME READY ELIGIBILITY: Any applicant who is a current, retired, volunteer, or non-paid is eligible for down payment assistance mortgage programs at Gustan Cho Associates. First responders (defined as a firefighter, police officers, Public Safety Officers, paramedics, or EMTs) are eligible for down payment assistance mortgage programs at Gustan Cho Associates. Christian Sorensen of Equity Prime Mortgage and the wholesale sale representative of the EPM FHA down payment assistance program said the following:
The Down Payment Assistance program at Gustan Cho Associates is forgivable after six months. You need a 620 credit score and a maximum 48% debt-to-income ratio. It needs to be borrower paid so you need to get a 6% seller concession.
Public primary, secondary, or public or private university educators are eligible. Wage earners in the medical field (doctor, nurse, phlebotomist, Health Ambassador, works in the hospital, even Red Cross workers). A Civil servant in a federal, state, or local municipality. All military personnel. Any borrower on the application is a first-time homebuyer. Must be purchasing a primary residence. A first-time homebuyer is defined as someone who has not had an ownership interest in a residential property during the three years preceding the date of the application.
How Does Down Payment Assistance Mortgage Process Work
How does down payment assistance work? The down payment assistance program is only eligible for one- or two-unit primary residences. This may not use to purchase an investment property or a second home. The loan is available at a 20-year, 25-year, and 30-year fixed rate only. An amazing feature of this loan product is the ability to utilize a 203k renovation mortgage to the FHA. The down payment assistance program will offer a 2% grant.
Forgivable Down Payment Assistance Mortgage Grant
The DPA mortgage program is 2% of the purchase price through a FORGIVABLE grant. That’s right. Utilizing this 2% Grant means you only need 1.5% of your funds to qualify for this FHA mortgage. Of course, having extra funds will help strengthen your loan application, but they are not required. Since this is an FHA DPA Mortgage product, you can utilize up to 6% of the purchase price as seller concessions. You may purchase a house for little or no out-of-pocket if you are lucky enough to get a large seller concession combined with this 2% Grant.
DPA Mortgage Program Highlights
Here are a few General outliners to use this program:
- No manual underwriting allowed
- AUS findings must be approve/eligible per automated findings
- The maximum DTI ratio allowed is 48.99%
- The maximum LTV allowed is 96.5%
- The minimum credit score requirement is 580 (must have to approve/eligible AUS)
- Maximum loan amounts follow HUD guidelines
DPA Mortgage Guidelines on HUD-Counseling Course Completion
At least one applicant must take a HUD-Approved homeownership counseling course. A list of approved counseling agencies can be found on the HUD website.
Click ON This Link For HUD APPROVED COURSES
This course is designed to teach you the ins and outs of homeownership. It will educate you on the unexpected costs of owning your home, such as a major appliance blowing out. You must pay for this course upfront but will be reimbursed $100 on your closing disclosure. You will need to provide proof of completion through a HUD-approved certificate. This course can be taken in person or online and takes about an hour.
How Much Does DPA Mortgage Help With Down Payment
This program can open up homeownership to thousands of Americans. As stated above, you only need 1.5% of your funds to complete this transaction. Those funds may also be in the form of a gift from an acceptable donor. Please get in touch with us at Gustan Cho Associates at 262-627-1965 for more information. Text us for a faster response to see if you qualify for this amazing program. You may also send an email to gcho@gustancho.com. The team at Gustan Cho Associates is available seven days a week, evenings, weekends, and holidays.